L2 Xero certification assessment Exam Answers 2026- Part 2

Summary

In this instructional video, Abid from Financials guides viewers through completing tasks for the Zero Level 2 exam. The tutorial covers adding new tax rates, creating chart of accounts, and entering sales invoices in the demo company. Viewers learn step-by-step how to add tax on income and expenses, set up revenue, expense, and bank accounts, and record a Boom FM sales invoice. The video also explains how to calculate totals and answer related exam questions. With clear instructions and practical demonstrations, this video equips learners with hands-on knowledge of Zero accounting software, making complex processes simple and accessible.

Takeaways

• 😀 The video explains how to add new tax rates in Zero Global Demo Company using the manual tax rate feature.
• 😀 Two specific tax rates are added: 'Tax on Income' at 20% and 'Tax on Expenses' at 20%.
• 😀 After adding these tax rates, the total number of tax rates in the demo company becomes 10.
• 😀 The tutorial demonstrates how to access and manage the chart of accounts in the system.
• 😀 New chart of accounts are created for revenue, expenses, and bank accounts with specific codes and names.
• 😀 A revenue account named 'Photoshoot Income' is added with tax on income applied at 20%.
• 😀 An expense account named 'Events and Catering' is added with the same 20% tax on income.
• 😀 A petty cash bank account is created under the 'Other' account type with account number and code details.
• 😀 The video shows how to create a sales invoice for the contact 'Boom FM' with multiple line items and applicable tax rates.
• 😀 The total value of the Boom FM invoice is calculated as 1,680 after entering all invoice details.
• 😀 The video emphasizes following instructions carefully for correct entry of tax rates, accounts, and invoice data in the system.

Q & A

What is the first step to add new tax rates in Zero Global Demo Company?

Navigate to Settings → Accounting Settings → Tax Rates, then click on 'Manual Tax Rate' to view existing rates and access the option to add new tax rates.

Which two new tax rates are added in the video tutorial?

The two new tax rates added are: 1) Tax on Income with a tax component of 'Tax' at 20%, and 2) Tax on Expenses with a tax component of 'Tax' at 20%.

How many total tax rates are present after adding the new rates?

After adding the new rates, there are a total of 10 tax rates in Zero Global Demo Company.

Which section of the system is used to add new chart of accounts entries?

New chart of accounts entries are added under Settings → Chart of Accounts.

What are the details of the revenue account added in the chart of accounts?

The revenue account details are: Type – Revenue, Code – 201, Name – Photoshoot Income, Description – Income from photoshoots, Tax rate – Tax on Income 20%.

What are the details of the expense account added in the chart of accounts?

The expense account details are: Type – Expense, Code – 350, Name – Events and Catering, Description – Room hire and catering for location shows, Tax rate – Tax on Income 20%.

How is the petty cash bank account set up in the chart of accounts?

The petty cash bank account is created with the following details: Account type – Other, Account name – Petty Cash, Account number – 12345789, Account code – 092, Currency – USD.

What information is required to create a sales invoice for Boom FM?

The sales invoice requires the following: Contact – Boom FM, Issue date, Due date (+30 days), Invoice number – 0031, Tax – Tax exclusive, Line item details including description, quantity, price, account (201), tax rate (Tax on Income 20%), and Region – Central.

What is the total value of the Boom FM invoice after entering all line items?

The total value of the Boom FM invoice is 11,680.

Which tax rate is applied to both the revenue and expense accounts in the tutorial?

Both the revenue and expense accounts are assigned the 'Tax on Income 20%' rate.